The heart of the wise inclines to the right,
but the heart of the fool to the left

Friday, September 26, 2008

Washington Mutual fails, world moves on

Yahoo News: "Washington Mutual, the largest U.S. savings and loan, was closed by the federal Office of Thrift Supervision, and the Federal Deposit Insurance Corp was named receiver. Customers should expect business as usual on Friday, the FDIC said.

The bailout came after the thrift suffered deposit outflows of $16.7 billion since September 15, the OTS said.

"With insufficient liquidity to meet its obligations, WaMu was in an unsafe and unsound condition to transact business," the OTS said."

The real winner here, ironically enough is JPMorgan Chase.

During a previous market collapse, the Panic of 1907, it was JP Morgan who lead a consortium of bankers in halting a titanic slide of the market by re-injecting capital into the market. Rockefeller was also instrumental in keeping the system afloat.

It was after this crisis our current Federal Reserve System was created, to manage the credit market and keep surplus capital in reserve to lubricate the market in times of need.

In years past, we've had times of market turmoil, and it was accepted that losses would be incurred. It was never an assumption that the taxpayers would save a company. If a problem was coming, or a crisis occurring, it was up to the masters of the universe, the titans of wall street and the man on main street to solve it themselves. This is how capitalism rewards its denizens, with vibrant riches and for those who fail in the market, failure with the hope of future success.

What this administration, and Treasury Secretary Paulson in particular, and much of the democrat congress are trying to pass is nothing but blatant socialism engineered to give to the rich at the expense of the middle class.

Inconceivable how this came to be accepted wisdom, and how far the Bush administration has fallen.